CC&R's filed AFTER my home purchase

JenniferJ3 (Texas)
Posts: 4

Posted:

I bought a home not quite 18 months ago. Yesterday the clubhouse manager made a comment on a community board about cc&r violations. I have no knowledge of any cc&r's and as far as I know nothing was filed with my deed. The manager emailed a copy of them to me and they were filed in Feb 2017, well after I purchased my home and well after this developer purchased the development (he is the 3rd developer and bought the remaining lots right before I purchased my home). There is no way I could have received a copy to peruse or agree to them as they did not exist at the time of my home purchase or even for almost a year afterwards!
I'm on the community board but the developer still has more than 51% of the lots, so we are not a formal org and really have no power of any kind. There's not much I can do along those lines. I'm checking my deed to see if, in fact, there were prior cc&r's that I was not informed of. If there were, I suppose it's possible that these are an update of the originals but have no idea how they would expect us to know about the updates without them actually telling us they did them.
If they aren't just an update, if they are something new that he has chosen to put in place, is he legally allowed to institute cc&r's against my and my neighbors properties without our permission? I'm just trying to figure out the legality of this move.

DouglasK1 (Florida)
Posts: 2,046

Posted:

I'll say first that I were to find myself in this position, I would get competent legal help.

If CCRs existed on your property when you bought it, they are subject to subsequent amendment following the procedure defined in the existing CCRs or possibly state law. This usually involves some percentage of voting interests (2/3, for example) to approve them. If the developer still holds enough votes (they might have more than one vote per lot), then they can amend without any homeowner support. These amendments would apply even if made after you bought the property.

If there were no CCRs originally, then I don't think they can attach them to your property after the fact.

Escaped former treasurer and director of a self managed association.

DouglasM6 (Arizona)
Posts: 724

Posted:

I suggest two things:

Check with the title company to see if the declarations are attached to the deed.

Go talk to a lawyer. This could be huge and internet opinion may not be the best for you.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I would not look at my deed. I would go to the courthouse (or website) to find a filed copy of the CC&R's. The Articles of Incorporation will be at the State level. That is where should find out how many times they been filed and which ones up to date. As for the By-laws, they may be new. Most states don't require them to be filed. Plus they are internal to the HOA. It may be possible your HOA did not have by-laws and created them recently.

Former HOA President

DaveD3 (Michigan)
Posts: 796

Posted:

Sound advice above.
However, I would go to the register of deeds to find out what is (or was) legally attached to the property as far as deed restrictions go.

If there was nothing at all, I would consult with an attorney. You would likely be free and clear of any obligation in that event.
If there was something that seems to have been changed/re-filed inappropriately, I would consult with an attorney.

LetA (Nevada)
Posts: 2,679

Posted:

Quote:

Posted By JenniferJ3 on 10/11/2017 2:09 PM
I bought a home not quite 18 months ago. Yesterday the clubhouse manager made a comment on a community board about cc&r violations. I have no knowledge of any cc&r's and as far as I know nothing was filed with my deed. The manager emailed a copy of them to me and they were filed in Feb 2017, well after I purchased my home and well after this developer purchased the development (he is the 3rd developer and bought the remaining lots right before I purchased my home). There is no way I could have received a copy to peruse or agree to them as they did not exist at the time of my home purchase or even for almost a year afterwards!
I'm on the community board but the developer still has more than 51% of the lots, so we are not a formal org and really have no power of any kind. There's not much I can do along those lines. I'm checking my deed to see if, in fact, there were prior cc&r's that I was not informed of. If there were, I suppose it's possible that these are an update of the originals but have no idea how they would expect us to know about the updates without them actually telling us they did them.
If they aren't just an update, if they are something new that he has chosen to put in place, is he legally allowed to institute cc&r's against my and my neighbors properties without our permission? I'm just trying to figure out the legality of this move.

And your point is??? Your developer can change the CC&R's 50 more times before the turn over. As a courtesy the developer "should" provide a copy to all the
deeded owners.

JenniferJ3 (Texas)
Posts: 4

Posted:

Douglas's yes, I'm working with my realtor to find out if cc&r's were filed against my deed. As far as I know they weren't, which would mean that any the developer filed would not apply to my property. And it would mean that there is a real mess to deal with in the coming years when he no longer has the controlling shares and the community sets up an HOA.

Melissa, there is no HOA of any kind. There is a recently formed community board, which is essentially a bunch of volunteers that meet up every few months to chat about the neighborhood and see if there are any issues we would like to bring up to the developer. Until more than 50% of the lots are sold, there won't be an HOA.

LETA, yes if there are cc&r's filed against my deed then the developer can do any and all updates they want without my permission and without notifying me up until he is no longer the majority shareholder in the neighborhood. My point is, as far as I know, there are NO cc&r's filed against my property. Which means any he files have no legal bearing on me.

JohnB83 (South Carolina)
Posts: 124

Posted:

I'll say first that I were to find myself in this position, I would get competent legal help.

If CCRs existed on your property when you bought it, they are subject to subsequent amendment following the procedure defined in the existing CCRs or possibly state law. This usually involves some percentage of voting interests (2/3, for example) to approve them. If the developer still holds enough votes (they might have more than one vote per lot), then they can amend without any homeowner support. These amendments would apply even if made after you bought the property.

If there were no CCRs originally, then I don't think they can attach them to your property after the fact.

I suggest two things:

Check with the title company to see if the declarations are attached to the deed.

Go talk to a lawyer. This could be huge and internet opinion may not be the best for you.

PERFECT

JohnB83 (South Carolina)
Posts: 124

Posted:

The OP's issue will be with any common elements which he is also using.

roads

street lights

pool

clubhouse

landscaping

signage

retention ponds

other drainage

etc

If used they must be funded.

So, he may need to pay some sort of 'dues' but NOT have any restrictions against his home.

THIS IS A MATTER FOR AN ATTORNEY WHO IS WELL VERSED IN CORPORATE/CONTRACT/HOA LAW

Pay a little now

OR

Pay a huge amount later after the lawsuits are filed

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Quote:

Posted By DouglasM6 on 10/11/2017 4:38 PM
I suggest two things:

Check with the title company to see if the declarations are attached to the deed.

Go talk to a lawyer. This could be huge and internet opinion may not be the best for you.

I agree. Forget the realtor playing lawyer.. This is a legal matter.

GeorgeR8 (Arizona)
Posts: 182

Posted:

Reread all of the papers you signed at closing.

Go to the county recorders web site. Search under your HOAs name to see what has been recorded.

If you find nothing call an attorney.

DaveD3 (Michigan)
Posts: 796

Posted:

Quote:

Posted By JenniferJ3 on 10/12/2017 5:54 AM
Douglas's yes, I'm working with my realtor to find out if cc&r's were filed against my deed. As far as I know they weren't, which would mean that any the developer filed would not apply to my property. And it would mean that there is a real mess to deal with in the coming years when he no longer has the controlling shares and the community sets up an HOA.

Melissa, there is no HOA of any kind. There is a recently formed community board, which is essentially a bunch of volunteers that meet up every few months to chat about the neighborhood and see if there are any issues we would like to bring up to the developer. Until more than 50% of the lots are sold, there won't be an HOA.

LETA, yes if there are cc&r's filed against my deed then the developer can do any and all updates they want without my permission and without notifying me up until he is no longer the majority shareholder in the neighborhood. My point is, as far as I know, there are NO cc&r's filed against my property. Which means any he files have no legal bearing on me.

I would go directly to the register of deeds, in person, and ask them.
Not that your realtor isn't capable, but if you want the best, most timely information, go to the source. I'm sure they would be willing to help if you explain that you're looking to see if there were any restrictions in place at the time of purchase.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By JenniferJ3 on 10/11/2017 2:09 PM
I bought a home not quite 18 months ago. Yesterday the clubhouse manager made a comment on a community board about cc&r violations. I have no knowledge of any cc&r's and as far as I know nothing was filed with my deed. The manager emailed a copy of them to me and they were filed in Feb 2017, well after I purchased my home and well after this developer purchased the development (he is the 3rd developer and bought the remaining lots right before I purchased my home). There is no way I could have received a copy to peruse or agree to them as they did not exist at the time of my home purchase or even for almost a year afterwards!
I'm on the community board but the developer still has more than 51% of the lots, so we are not a formal org and really have no power of any kind. There's not much I can do along those lines. I'm checking my deed to see if, in fact, there were prior cc&r's that I was not informed of. If there were, I suppose it's possible that these are an update of the originals but have no idea how they would expect us to know about the updates without them actually telling us they did them.
If they aren't just an update, if they are something new that he has chosen to put in place, is he legally allowed to institute cc&r's against my and my neighbors properties without our permission? I'm just trying to figure out the legality of this move.

First CLUE to potentially having an HOA would be the fact you have a Clubhouse. How would you think the "clubhouse" facility is paid for ... if not without any HOA assessments???

Potentially the CCR's you were given dated Feb 2017 were an Amended copy filed after your purchase. The question would be ... were they filed following your CCR's and State Laws?

When you closed on your home did you obtain Title Insurance? If you did then look at your insurance documents to see if they note an HOA. If they DO NOT note an HOA then they themselves would be liable for helping you protect the title to your property with regards to any encumbrances.

JenniferJ3 (Texas)
Posts: 4

Posted:

My realtor sent me a copy of the CC&R's that the title company had on file (apparently they didn't feel the need to provide them to me at closing?). The cc&r's were from 2013; as my house is quite a bit older than that, I will have to do some digging to see if cc&r's are filed against the original deed.

As I noted previously, we do NOT have an HOA. We do pay fees to cover the upkeep of the clubhouse and common areas but they are in the form of a PID (Public Improvement District); I pay them along with my mortgage, homeowners insurance, and taxes every month. The money goes to the developer and he then pays for the clubhouse manager and bills.

The city holds the clubhouse mortgage. Before the current developer bought the open lots, during the upheaval with at least two other developers coming and going, the city kept the bills paid and provided a manager.

Once the current developer no longer has the majority shares, the residents can decide if we want to form an HOA that will then take over running the common areas (including the clubhouse) and paying the bills. If we don't choose to form an HOA, the developer will continue running the property until he has no more financial interest in the area (he has sold off all of his vacant lots). The managers contract will then be taken over by the city and the city and the manager will run the common areas.

The city understandably does NOT want to run the properties again so the neighborhood will most likely decide to form an HOA.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By JenniferJ3 on 10/19/2017 3:41 AM
My realtor sent me a copy of the CC&R's that the title company had on file (apparently they didn't feel the need to provide them to me at closing?). The cc&r's were from 2013; as my house is quite a bit older than that, I will have to do some digging to see if cc&r's are filed against the original deed.

As I noted previously, we do NOT have an HOA. We do pay fees to cover the upkeep of the clubhouse and common areas but they are in the form of a PID (Public Improvement District); I pay them along with my mortgage, homeowners insurance, and taxes every month. The money goes to the developer and he then pays for the clubhouse manager and bills.

The city holds the clubhouse mortgage. Before the current developer bought the open lots, during the upheaval with at least two other developers coming and going, the city kept the bills paid and provided a manager.

Once the current developer no longer has the majority shares, the residents can decide if we want to form an HOA that will then take over running the common areas (including the clubhouse) and paying the bills. If we don't choose to form an HOA, the developer will continue running the property until he has no more financial interest in the area (he has sold off all of his vacant lots). The managers contract will then be taken over by the city and the city and the manager will run the common areas.

The city understandably does NOT want to run the properties again so the neighborhood will most likely decide to form an HOA.

Ahhh ... Interesting that your CITY owns the clubhouse property. I am assuming at some point the original Developer had potential financial issues in past and this is how he City helped out. Potentially you are incorrect regarding NOT having an HOA ... If you PAY for upkeep of any "common interest property" whether to your City or developer ... YOU are an HOA. If you have title insurance I would be willing to bet it notes the Book and Page Numbers of the HOA filed against your property title.

JenniferJ3 (Texas)
Posts: 4

Posted:

At least 2 former developers had financials difficulties, though it is my understanding that the city has always held the mortgage on the clubhouse and common areas. We are not an HOA because we are a PID (public improvement district).

JanetB2 (Colorado)
Posts: 4,219

Posted:

Quote:

Posted By JenniferJ3 on 10/19/2017 8:29 PM
At least 2 former developers had financials difficulties, though it is my understanding that the city has always held the mortgage on the clubhouse and common areas. We are not an HOA because we are a PID (public improvement district).

Hmmm ... So the TX Statutes for "Public Improvement District" is noted as: http://www.statutes.legis.state.tx.us/Docs/LG/htm/LG.372.htm

Potentially my question would be is just your "clubhouse" property considered PID and the homes under an HOA???